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28 May 2023

UAE economic growth to slow: NBK

By Reuters

Economic growth in the UAE will slow to one per cent this year on lower oil output and a slowing non-oil sector, National Bank of Kuwait said yesterday.

"It is widely believed that the UAE is the most-heavily exposed of the region's economies to the dramatic deterioration in the global economic and financial climate," NBK said in a research note.

"The ending of the recent multi-year boom in the UAE economy will be sharp and usher in a sustained period of much weaker growth."

Growth in real gross domestic product (GDP) will slow to one per cent this year compared to five per cent in 2008, NBK said. Analysts in a Reuters poll last month forecast real gross domestic product growth of 2.7 per cent in the UAE.

NBK forecast the non-oil sector is likely to grow two per cent but "could be less". Average growth in that sector was 16 per cent between 2002 and 2007, the research note said.

The bank noted that the hydrocarbon sector's contribution to UAE real GDP would contract two per cent this year in the wake of output cuts by the Organisation of Petroleum Exporting Countries.

The bank added that inflation, which hit a 20-year high of 11.1 per cent in 2007, was set to fall to seven per cent this year, down from 14 per cent in 2008.